Shares of DraftKings could surge 40% from their current level, according to Piper Sandler. Analyst Matt Farrell initiated research coverage of DraftKings with an overweight rating, saying it's time for investors to take another look at the online sports betting company. "With profitability expectations reset after the initial 2023 guide, we believe current levels represent an attractive long-term entry point, particularly with the risk of a future capital raise largely diminished," Farrell wrote in a note Friday. "Furthermore, while we understand the profitability scrutiny in the current environment, we feel it somewhat misses the forest for the trees, as investors would likely be questioning the broader market opportunity if the company were profitable in Q4 2022," Farrell added. Because of those concerns, shares of DraftKings tumbled more than 45% this year. Still, Piper expects that DraftKings has a "clear and repeatable" path to profitability, as the company targets fourth quarter 2023 as a break-even point, based on 2023 adjusted EBITDA estimates, according to the note. Other catalysts behind Piper's call include DraftKings' leading position in online gaming and sports betting's $80 billion total addressable market across the United States and Canada, according to the note. He also expects that social media will continue to drive growth on the platform. "Overall, we recommend investors own DraftKings for exposure to the rapidly growing online sports betting and iGaming markets," Farrell wrote. The analyst's $21 price target represents roughly 41% upside from Thursday's closing price of $14.90. The stock is up about 4% in Friday morning trading. — CNBC's Michael Bloom contributed to this report.